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WOLF BLITZER, CNN ANCHOR, THE SITUATION ROOM: Fears the U.S. mission in Afghanistan is collapsing, even as the president unveils his new war strategy. This hour, an urgent appeal from the NATO secretary general to prevent troops from dying.

Plus, she campaigned for Barack Obama while keeping a life-and-death secret. Congressman Debbie Wasserman Schultz is now opening up about her battle against breast cancer.

And the actor Tom Sellick on a cause that's very close to his heart, honoring the fallen troops of the Vietnam war. We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer. You're in THE SITUATION ROOM.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We put in place a comprehensive strategy designed to attack this crisis on all fronts. It's a strategy to create jobs, to help responsible homeowners, to restart lending and to grow our economy over the long-term.

(END VIDEO CLIP)

BLITZER: A huge week for the U.S. economy with major developments on several fronts including a very controversial plan to buy up the bad assets of banks and free up credit for consumers. I spoke with two of the president's top economic advisers. First, Larry Summers, the director of the White House National Economic Council.

(BEGIN VIDEO CLIP)

BLITZER: If this works, how long will it take to free up the credit market and get money flowing out there?

LAWRENCE SUMMERS, DIR., NATIONAL ECONOMIC COUNCIL: You know, Wolf, it's not a thing that happens on/off like a light switch. It's a thing that happens over time. You've seen some modest improvements in credit markets since President Obama took office and since Secretary Geithner provided a framework for restoring financial stability. Mortgage rates have come down substantially. The number of people were able to refinance their homes has increased 30 percent in the last month alone, putting a lot of money into peoples' pockets, new money --

BLITZER: So are we talking weeks or months?

SUMMERS:... for small businesses. I think you're seeing some impact already, but these problems didn't get made in a week or a month or even in a year and it's going to take time for a full normality in financial conditions and in the economy to be restored. But I think that process of repair is on the way and I think it took another important step today with the announcements that Secretary Geithner made.

BLITZER: Who's going to oversee the plan that was announced today? What kind of oversight is there going to be in terms of accountability?

SUMMERS: Well, the ultimate accountability, as the president always says, rests with him. But this is an initiative that is being spearheaded by the Treasury Department with the participation and its different components of the FDIC, led by Shelia Bair and of course, the Federal Reserve, led by Chairman Ben Bernanke. But it's a Treasury-based plan to use capital that's been made available, to restart our lending markets at a time when the lack of a satisfactory credit market is hurting automobile sales. It's hearting students' ability to go to college. It's one of the things holding back the housing market. And so it's an important approach to once again, create a market.

BLITZER: Larry, Ben Stein, the economist, told us that this is a bonanza, potentially, for the private sector, those firms that are going to be working with the Federal government. They really have very little to lose, but they have a lot of money potentially to make thanks to the Federal government. Is he right?

SUMMERS: I think there are some attractive investment opportunities here. And certainly the response from a number of market participants to the Treasury's discussion suggests that they do see attractive opportunities here, but it's important to realize that taxpayers are going to be investing alongside the private sector and so if there are any substantial benefits, taxpayers will share in them very directly as investors.

BLITZER: But the taxpayers also will have the downside. Will the private equity firms, the banks who get involved in this, do they have a downside?

SUMMERS: Wolf, no government -- none of the government financing will lose any money unless the private sector loses all of its money. The private sector is exposing itself to the full so-called first loss on this. So the money that the government's lending, the so-called leverage, that doesn't lose any money at all until the private sector has been completely wiped out. Moreover, the government's going to collect a fee for this. It's a little frustrating, frankly, when people argue at the same time, first that the private sector is going to make too much money. The private sector makes money, the government's going to be making a lot of money as well. And then they somehow argue that the whole thing is wrong because the government's going to be the one that loses money. In fact, there's a careful balance struck here through the way these loans are priced, that assures that taxpayers are protected, that taxpayers have a chance to share in the upside.

(END VIDEO CLIP) BLITZER: And then there's President Obama's budget, all $3.6 trillion of it. Critics say it could drive the nation into bankruptcy. I asked the White House Budget Director, Peter Orszag, about that.

(BEGIN VIDEO CLIP)

BLITZER: Even a lot of Democrats, moderate Democrats in the Senate and the House, they say the country simply can't afford what you're proposing. They're looking to scale back and in terms of the Senate Democrats, the moderate ones, maybe by hundreds of billions of dollars over the next 10 years, what you have in mind. You just came from the Hill with the president. You met with them. How big of a problem do you have with those Democrats?

PETER ORSZAG, WHITE HOUSE BUDGET DIRECTOR: The president got a very warm response from the Senate Democrats. The chairman's mark that is being considered by the Senate Budget Committee today is fully in line with the four principles that the president has put forward, cutting the deficit in half, investing in health care, investing in education and investing in clean energy. I'm confident that what will come out of the Senate is something that fulfills the budget priorities the president has put forward.

BLITZER: But they don't want to go forward with making that middle class tax cut that you have for the next two years as part of the stimulus package. They don't want to make it permanent, because they say it's simply too expensive.

ORSZAG: Well, again, we've gotten the four priorities that we identified. It was never going to be the case that we would just send up a budget and they would take absolutely everything in it. We do have the making work pay tax credit in law for two years and we've got two years to figure out how to finance its extension. That's why we're asking the Volcker board to take a close look at for example the tax gap, $300 billion a year in taxes that are owed that are not collected. That would more than pay for making work pay.

BLITZER: Most of the Republicans and indeed a bunch of Democrats as well say the country can't afford what you would like to do as far as carbon emissions are concerned, have the so-called cap and trade tax, if you will, making electricity, gasoline, even more expensive for American consumers. While worthwhile, it would simply be too expensive. Are you willing to back away from that as well?

ORSZAG: Again, the key thing we want to do is reduce our dependence on foreign oil and move towards clean energy. I think what we're seeing emerge from the House and Senate on cap and trade specifically is perhaps moving that outside of the budget resolution process.

BLITZER: So in other words, not making it what you originally wanted, but you're ready to compromise on that?

ORSZAG: Again, what we're focused on is investing in clean energy and reducing dependence on foreign oil. And with regards to cap and trade, there's different ways for getting legislation done.

BLITZER: Cap and trade, effectively, the Republicans say, would be a tax on gasoline, electricity and other forms of energy. Is that right?

ORSZAG: I wouldn't characterize it like that. There will be effects on energy prices, but again global warming and global climate change is one of the key threats facing our planet and we will need to address it at some point.

(END VIDEO CLIP)

BLITZER: Some top Republicans are accusing the Treasury secretary of a power grab.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Wolf, by way of full disclosure, I didn't think Timothy Geithner should have been confirmed to begin with.

Plus, a startling gap between black and white Americans when it comes to jobs and income. The National Urban League president on the stark realities behind the statistics.

And the next chapter for the Vietnam war memorial. The actor, Tom Sellick, on his role in honoring fellow veterans who didn't make it home.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: Let's look towards the future with a renewed sense of common purpose, a renewed determination and most importantly a renewed confidence that a better day will come.

(END VIDEO CLIP)

BLITZER: A stunning request to Congress this week from the Treasury Secretary Timothy Geithner, asking for broad new powers to head off the next potential financial meltdown. Not only are Republicans opposed to Geithner's proposals, some say he shouldn't even be Treasury secretary in the first place. Joining us now from Capitol Hill, Republican Congressman Mike Pence of Indiana. Congressman, what's wrong, if anything, you believe, that the administration wants the Treasury Department to have the same kind of authority together with the Federal Reserve over non-bank financial institutions, like AIG for example. They want the same kind of regulation that the FDIC has over banks. What's wrong, if anything, with that?

REP. MIKE PENCE (R) INDIANA: I think the concern many House Republicans have of what would amount to really an extraordinary power grab by the Federal government is what institutions are we really talking about? I mean, what we understand, at least so far -- and I want to give the administration's proposal a fair shake here, but what we understand so far is that the administration is looking for the authority to come in in a preemptive way and be able to take over non- banking institutions, hedge funds and the like when there's a threat of systemic risk. We just -- before you grant that kind of expansive authority to the Treasury Department, we're going to need to understand what the parameters of that are so that we protect, essentially, the freedom and independence of the free market itself, private property, but also that we protect the American taxpayer from more bailouts, more expansion of the Federal government's role in the private sector.

BLITZER: What the Treasury Secretary Timothy Geithner and the chairman of the Federal Reserve Ben Bernanke, what they are argue is if the Federal government would have had that authority, back let's say, in September of this year, this whole AIG disaster could have been avoided. They could have forced AIG, for example, to go into some sort of receivership and then had an orderly, orderly dispersal of that institution without causing economic panic around the world.

PENCE: Well, you know, I don't question their sincerity, but quite frankly, a reorganization bankruptcy was always available to AIG. I understand a number of members of the board of directors of AIG today, Wolf, actually believe that they would be better off today -- and I know the American taxpayer would certainly be better off today -- if they'd had actually gone through an orderly bankruptcy instead of this massive government bailout. It was $700 billion last fall. It's expanded into the automotive industry. Now we have a new expansion that the Geithner plan contemplates. And I just -- I'm someone who believes the existing institutions were there in our Federal bankruptcy courts. And before we extend new authority, create new institutions on Capitol Hill, we really need to understand what the need is, what the parameters are and how we can ensure the ongoing vitality of our free market system is not compromised.

BLITZER: Do you have confidence in Timothy Geithner, the Treasury secretary?

PENCE: Well, you know, Wolf, by way of full disclosure, I didn't think Timothy Geithner should have been confirmed to begin with. I think it's sent the wrong message to the American people that someone who had not paid their taxes on several instances was put in charge of the department that's governed with collecting taxes. But, look, he's the Treasury secretary now. I'm not calling for his resignation at this point in time, but we are going to turn a very critical eye toward any effort by this administration to further expand the size and scope of government into what is, with all the troubles we've gone through, is still the strongest and most dynamic economic model on the planet.

BLITZER: Mike Pence, of Indiana, Republican. Thanks very much for joining us.

PENCE: Thank you, Wolf.

BLITZER: Another key Republican also still opposed to the president's recovery plan, despite hints this plast week of improvement in areas like housing. Republican Senator John Ensign of Nevada is a key member of the Senate Finance, Budget and Commerce committees. (BEGIN VIDEO CLIP)

BLITZER: Are you at all concerned that you might be on the wrong side of this debate, assuming these positive indicators continue to come forward?

SEN. JOHN ENSIGN (R) NEVADA: Well, listen, we all have to hope whatever, whether you're against something or not, you have to hope that it works. Because we want the economy to recover. I want people in my state to do better. I don't want them to lose their homes. I want them to be able to have jobs. But I am concerned at some of the things that they're doing will not work. We did have a proposal that at least the homebuilders in my state and a lot of homeowners thought would have worked as an alternate to the stimulus bill. And that $15,000 tax credit, the homebuilders are not coming back to us and say, why did that get stripped out? We said, you know what, Republicans weren't in that conference committee when that got stripped out.

BLITZER: Here's what the president said at his news conference. Listen to this.

OBAMA: We haven't seen an alternative budget item and the reason is, because they know that, in fact, the biggest driver of long-term deficits are the huge health care costs that we've got out here.

BLITZER: Talking about you, you're in the Republican leadership. Where is your alternative plan as far as the budget is concerned?

ENSIGN: Sure. Actually, what we're going to do is we're going to offer an alternative plan by amendment.

BLITZER: So no one formal plan?

ENSIGN: You don't need to do one formal plan. You take their basic structure and you radically amend it. We're going to have some huge amendments that will show a different vision forward that won't--

BLITZER: Give me an example.

ENSIGN: Well, first of all, we'll have an amendment as far as cap and trade is concerned. We don't want -- we don't want a massive electricity and an energy tax put on the American people.

BLITZER: Even if it's going to reduce carbon emissions and make the planet safer?

ENSIGN: I don't think the average family can afford an additional $3,000 per year being taken away from their budget. That's not -- that's not the right thing to do. The other thing is, is the massive amount of spending that goes into this bill. We end up running up our children's credit cards to the point where today we spend about $180 billion a year on interest per year. That's what we pay on our debt which is a massive amount right now. By the end of this 10-year president's budget, it goes to over $800 billion a year.

(END VIDEO CLIP)

BLITZER: John Ensign, the Republican senator from Nevada.

Publicly, she was one of President Obama's staunchest supporters. Privately, she was keeping a life-and-death secret.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Got the call that every woman dreads and was told that I was not fine and that I had breast cancer.

(END VIDEO CLIP)

BLITZER: A congresswoman talks about her secret here and says there are things some of you may need to worry about.

And a new report says African-Americans are far more worse off compared to whites.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: I think that the last 64 days has been dominated by me trying to figure out how we're going to fix the economy and that affects black, brown and white.

(END VIDEO CLIP)

BLITZER: In the same environment that put the first African- American president in the White House, also erase radical discrimination, division and inequality in the United States. Not so far says a new report. The National Urban League says even amid history, African-Americans have a 71 percent status gap against that of whites. It also says blacks are twice as likely to be out of work compared to whites, three times as likely to be poor and more than six types as likely to be in prison. So what can be done about all these disturbing figures? Joining us now Marc Morial, the president and CEO of the National Urban League, the former mayor of New Orleans. Mayor, thanks for coming in.

MARC MORIAL, PRES & CEO, NATIONAL URBAN LEAGUE: Good to be with you Wolf.

BLITZER: This is it, "The State of Black America 2009." I get this book every year. You guys do an excellent job reviewing what is going on. But stuff doesn't seem to change. We're not seeing an improvement. Explain.

MORIAL: It's glacial. Progress is glacial. But I think the import of this report this year is that in the last eight years, we've lost ground. And because of the way we do the index, we've lost ground, but interestingly, the numbers also show that white Americans lost ground in the last eight years.

BLITZER: The overall economy's in trouble, everybody goes down. But what I hear you saying and what this book says is that black people are hurting more -- at least proportionately.

MORIAL: Even more, slightly more, particularly in the field of economics. When you look at joblessness, when you look at the home ownership rate, there's been great increases in unemployment, great decreases in the home ownership rate. And those are areas of concern. But, Wolf, we also don't just focus on the diagnosis. We've got prescriptions in there, recommendations and suggestions that --

BLITZER: So hopefully a year from now when we meet again, the next state of black America will be a little bit more hopeful. We ask viewers to send us in some I-reports, video I-reports, comments, questions knowing you were coming in and releasing this important document today. Here's a guy named Egberto. Turn around. We're going to play his I-report, comes to us from Houston, Texas.

(BEGIN VIDEO CLIP)

EGBERTO WILLIES, CNN IREPORTER: The vast majority of black America is doing just fine. That said, while our justice system needs to address the fact that black males are punished much more harshly, these kids must be kept out of the system in the first place. While the education system tends to expect the underperformance of black kids, parents and civic organizations must prevent these kids from living down to these expectations.

(END VIDEO CLIP)

BLITZER: What do you think Mr. Mayor?

MORIAL: He's making some great points about the criminal justice system, but there are African-Americans who are doing, certainly, far better than 40 years ago.

BLITZER: The vast majority of black America is doing just fine, that's what he said.

MORIAL: I don't think most people would agree with that with the sub- prime crisis, with the joblessness. Because you could be doing OK and members of your family could be hurting thereby placing additional responsibility -- I don't know if I would completely agree with that characterization in these difficult economic times.

BLITZER: Here's another I-report we got in (INAUDIBLE) This is Nino Larocca of Queens in New York.

(BEGIN VIDEO CLIP)

NINO LAROCCA, CNN IREPORTER: Why does it have to be a color issue here? Why can't you just say, what is your assessment of the state of America today? Why does it have to be a black America?

(END VIDEO CLIP)

MORIAL: I think one of the things we have to respect in the nation is that while we do have and we seek one America, there is a black America, there is a Hispanic America, there is a Jewish America, an Italian America, an Irish America. That tapestry represents what we are. We're unique. So in order to be one, we don't have to not be who we are. We've got to respect who we are while at the same time embracing the notion of America being a nation that is a tapestry, a mixture and a mosaic. But why do we look at black America as distinct from state of the union? The president reports on the state of the union. We think it's important to report on the state of black America.

BLITZER: There is an African-American first family in the United States right now. And a lot of people sitting back saying, you know what, it's over. The hard work is over with, we can now relax. You don't believe that?

MORIAL: I don't think many fair-thinking people believe that. But we affirm, we celebrate President Obama and his wonderful family, his accomplishments and his achievements. And we believe it's a strong step in the right direction. But our goal is for everyone to enjoy a positive quality of life, for the disparities that have historically existed to be gone. When we achieve that, we'll close shop and go home.

BLITZER: Marc Morial, thanks for coming in.

MORIAL: Thanks you, thanks Wolf as always, my pleasure.

BLITZER: A congresswoman is opening up about her secret battle against breast cancer.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I wanted to make sure that I could get all the way through the surgeries and procedures and be able to tell them honestly that mommy was really going to be OK.

(END VIDEO CLIP)

BLITZER: Debbie Wasserman Schultz reveals the personal crisis she went through, even while campaigning for Barack Obama.

And the actor Tom Selleck on a mission to honor fallen war heroes. He's also responding to rumors about his next career move.

(COMMERCIAL BREAK)

BLITZER: President Barack Obama frequently relied on her as he campaigned for president. But as she kept a hectic campaign schedule, very few people knew she was battling something very disturbing.

(BEGIN VIDEOTAPE)

BLITZER: And joining us now, Democratic Congresswoman Debbie Wasserman Schultz, representing the state of Florida.

Now, turn around and take a look at some of these pictures we're showing our viewers. There you were, campaigning with the president of the United States. He eventually won. You were out campaigning earlier for that woman. That would be Hillary Clinton.

(LAUGHTER)

BLITZER: You were very, very busy last year, not only representing your district, but also working to get Democrats elected.

But there was a great secret you were not sharing with your constituents and with all of us.

WASSERMAN SCHULTZ: Yes. I was diagnosed with breast cancer at the beginning of December of 2007, and, between December 2007 and December 2008, went through seven fairly major surgeries to address the breast cancer. And, since I was subsequently diagnosed as carrying the breast cancer gene, had my ovaries removed as well.

BLITZER: So, you went through an enormous -- I remember seeing you at the Democratic Convention last summer in Denver. And we spent some time together. I had no idea what you were going through at that time. And I assume very few people did.

WASSERMAN SCHULTZ: I actually had just had my reconstructive surgery at the -- right before the convention. So, it was -- it was a tumultuous time for me. I had a lot of balls in the air last year.

But, you know, honestly, between the primary, you know, and my involvement in Senator Clinton's campaign, Secretary Clinton's campaign, and then the -- the Obama campaign, it -- it really gave me an opportunity to concentrate on everything else but what I was going through personally. It was a tremendous help.

BLITZER: All right, now, let -- how were you first diagnosed? How did you know in December of 2007 that you might have breast cancer?

WASSERMAN SCHULTZ: I -- I found -- I found a lump myself.

I was doing a routine self-exam in the shower and felt a lump in my right breast, was, you know, panicked, kept feeling it to make sure that I was right, had my husband feel it, and subsequently went to the doctor a few days later and had a biopsy, over which there was some debate on whether I should -- needed that at all, which happens to young women pretty often, and initially was told I was fine after -- right after the biopsy, but, three days later, got the call every woman dreads, and was told that I was not fine and that I had breast cancer.

BLITZER: And so then what did you do?

WASSERMAN SCHULTZ: Well, we went through the range of treatment options. I was very fortunate. We caught it early, because I found it myself. It was less than -- a tumor that was less than half-a- centimeter.

But because I am a woman of Ashkenazi Jewish descent, and I was 41 when I was diagnosed, which was one of the indicators of possibly being a carrier of the breast cancer gene, I had a blood test. And, a month later, when the results came back, we found that I carried the breast cancer gene.

So, I went from having -- being able to have a more mild form of treatment, just a lumpectomy and radiation, to needing to make a decision to have a double mastectomy and reconstructive surgery, and, then, ultimately, have my ovaries removed, because when you carry the breast cancer gene, you are much more likely to -- to have a recurrence in breast cancer.

And, so, my doctor's advice was to -- to have pretty significant treatment.

BLITZER: And women of your age who are Jewish, of Ashkenazi descent, like African-American women have a...

WASSERMAN SCHULTZ: Yes.

BLITZER: ... a greater proportion of getting the -- the worst-case scenario.

WASSERMAN SCHULTZ: Which I didn't even know. I mean, I have been a legislature for 17 years, been -- passed breast cancer legislation in the -- in the Florida legislature, and had no idea that I was in a higher-risk population for carrying that gene.

I knew the gene existed, but I didn't realize that -- that I was possibly more likely to carry it. And when you -- one in 40 Jews carry that -- that breast cancer gene. It doesn't mean you're going get breast cancer. But if you -- it makes it more likely. And if you do have it, it makes a recurrence much more likely. It makes ovarian cancer much more likely as well.

BLITZER: And you decided to keep this secret, I take it in part because of -- you have three young kids, right?

WASSERMAN SCHULTZ: Yes. It was a very -- it's a very a personal decision that every woman needs to make on their own on how they're going to handle dealing with -- with the treatment of breast cancer.

My children were 8 and 4 when I was diagnosed. And cancer is a very scary thing. And I just really wanted to be able to get through all of the treatment that I -- and surgeries I was going to have. I was fortunate I was able to avoid radiation and chemotherapy, because I caught my breast cancer so early, which is why self-exam and -- and early detection is so important.

I wanted to make sure that I could get all the way through the surgeries and procedures and be able to tell them honestly that mommy was really going to be OK.

BLITZER: And they -- they -- how have they handled all this? WASSERMAN SCHULTZ: You know, when I sat them down over the weekend -- I just told them Saturday, and they -- they handled it really well. I -- I spoke to them, you know, very casually, didn't make a huge deal out of it. It wasn't like a formal conversation.

I just mentioned -- they knew I had the surgery. I mentioned that, you know, mommy had -- remember when mommy had something removed from her breast that didn't belong there? What that was, was breast cancer. And, you know, my -- my 9-year-old daughter's eyes got as wide as saucers. And she -- the first question she had is, well, you're OK, right?

And then asked me, "Am I going to get cancer?" which so many young children do. And I knew, while I was going through it, that if I had to deal with those questions -- I travel back and forth so much -- the angst that they would have carried, I just wanted to make sure I could relieve it. And once I was all the way through it, I knew that I could.

And I did the same -- my other two children reacted similarly. My son and my -- my youngest daughter just wanted to make sure I was OK once they knew I was OK.

BLITZER: And your husband was a real rock?

WASSERMAN SCHULTZ: My husband was unbelievable. My husband, you know, took care of the kids. I had my surgeries up in Washington. And he -- he stayed home with the kids.

And we wanted to make sure that, you know, their life would remain normal while I was going through all of this. And my mom and my best friends, you know, came up and took care of me while I was going through the surgery.

And I scheduled the surgery around the congressional recesses and, you know, on days -- days when we didn't have votes, and, you know, would go to the floor. I would have surgery in the morning and stay in my apartment all day, go to the floor, cast a vote, and go back home.

BLITZER: It was an amazing year. And thank God you're OK.

WASSERMAN SCHULTZ: Had a lot of balls in the air.

(LAUGHTER)

BLITZER: And you're doing just fine.

WASSERMAN SCHULTZ: Thank you.

BLITZER: And now you're going to be active in bringing this message out to women and men just to...

(CROSSTALK)

WASSERMAN SCHULTZ: ... filing legislation.

BLITZER: ... to make sure they try to detect it early.

WASSERMAN SCHULTZ: Yes, we're filing legislation that I filed today called the EARLY Act, the Education and Awareness Requires Learning Young ACT -- 185 members co-sponsored it. Sorry. It's -- it was really -- the -- the reaction that has been so wonderful.

We're trying to make sure that we create an education and awareness campaign for young women, because young women are diagnosed usually much later, when they have breast cancer, and it's a more aggressive form of breast cancer. And populations, at-risk populations, like Ashkenazi Jews and young black women, don't know that they are more at risk to be carriers of that gene.

And doctors often dismiss women when they come in and have a problem. So, we need to educate doctors and young women about the importance of early detection.

BLITZER: And Ashkenazi Jews are Jews from European descent...

WASSERMAN SCHULTZ: Yes.

(CROSSTALK)

WASSERMAN SCHULTZ: Eastern European descent.

BLITZER: ... as opposed to African or Middle East.

WASSERMAN SCHULTZ: Yes.

BLITZER: Well, we're really happy you're here.

WASSERMAN SCHULTZ: Thank you. Me, too.

(LAUGHTER)

BLITZER: Thanks for telling -- thanks for telling us your story. And we hope you will be visiting us often here in THE SITUATION ROOM.

WASSERMAN SCHULTZ: I hope so, too, if I'm invited. Thank you.

(LAUGHTER)

(END VIDEOTAPE)

BLITZER: U.S. troops and NATO forces dying at an alarming rate right now in Afghanistan. Can President Obama's new strategy for that war turn the tide? I'll ask the NATO's secretary general.

Plus, the ghosts of the Vietnam War. The actor, Tom Selleck wants their stories told. He's here in THE SITUATION to explain why this mission is so personal to him.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP) BARACK OBAMA, PRESIDENT OF THE UNITED STATES: This administration is going through an evaluation, a strategic review of our approach to Afghanistan and we expect to share that with our NATO counterparts.

(END VIDEO CLIP)

BLITZER: In Afghanistan, the insurgency is on the rise and so is the death toll. As part of his new strategy, the president says he's sending another 4,000 troops in, but as America steps up its war effort there, the pressure is on America's allies to do the same thing.

(BEGIN VIDEOTAPE)

BLITZER: And joining us now, NATO secretary general Jaap De Hoop Scheffer. Secretary General, thanks very much, welcome to Washington.

JAAP DE HOOP SCHEFFER, NATO SECRETARY GENERAL: Thanks for being on the show.

BLITZER: NATO is directly involved in Afghanistan right now, but there's enormous fear the whole operation could be collapsing, even as we speak. More troops, NATO troops, U.S. troops, are dying from IEDs than ever before. How bad is the situation?

SCHEFFER: Well, collapse is absolutely the wrong word. There are parts of Afghanistan, if I go to the North or the West, parts of the East but the challenges are huge and we should see this more than we have done in the recent past. And I think there President Obama is on the mark.

BLITZER: He's trying to do a new strategy. He's coming up with a new strategy, even as we --

SCHEFFER: We need more forces, but we also need much more attention on the civilian side, because we are not looking for a military victory there. It is reconstruction, development, and the fight against terrorism.

BLITZER: As you know, there's a deep concern here in Washington at the highest levels of the U.S. government that the European NATO allies are not stepping up, not providing enough troops for Afghanistan, not enough money for Afghanistan. What do you say?

SCHEFFER: That is an exaggeration, but -- my but follows immediately -- it is important that the European allies match President Obama's ambition on the military and on the civilian side. They can never match the figures, but if they can't do it militarily, let them see that we have a balance in the alliance on the military and the nonmilitary front, i.e. on the civilian side --

BLITZER: Some NATO allies don't even want to do anything, do they?

SCHEFFER: That's not true. There's a coalition of 42 nations in Afghanistan as we speak, all 26 NATO allies have involved.

BLITZER: But they won't get involved in combat. Some of them won't get involved in combat.

SCHEFFER: Well, we still have 17 allies, partners involved in combat in the South. So we're not doing that badly.

BLITZER: But is that the way NATO was envisaged, that some NATO allies would be willing to engage in combat, but others would not?

SCHEFFER: Well, they're all, in a sense, under threat of improvised explosive devices or suicide attacks. But I think that the bottom line should be that the less limitations on the use of forces we have, caveats, we call them, the better it is. And in the five years that I've been secretary general, and I repeat that plea in front of your camera. I made a plea for fewer caveats, and they still have too many, I agree.

BLITZER: Has Russia effectively preempted NATO's ability to expand by doing what it did last year in the Republic of Georgia?

SCHEFFER: I don't think so. I think the decision taken by the heads of state and government in Bucharest and Romania a year ago stands. And that is that Georgia and Ukraine will eventually become NATO members, when eventually is difficult to predict. We have a fundamental disagreement, fundamental disagreement with the Russians on their recognition of parts of Georgian territory, Abkhazia, South Ossetia. We have a fundamental disagreement about their intentions to have military bases there. The relationship with Russia, nevertheless, for NATO, is an important one.

BLITZER: Is it a resurgent Russia that's coming right now under President Medvedev and Prime Minister Putin? How worried are you?

SCHEFFER: Well, I do not consider Russia a threat, but we have fundamental differences and it's important that on the NATO side, we do not depict Russia as a threat.

It's important, that's the message from President Medvedev and Prime Minister Putin, that they do not depict NATO as an aggressive alliance, as an aggressive organization. We've always been defensive and we'll always stay defense.

But my bottom line is NATO needs Russia and Russian needs NATO. So no talking to each other will never solve any problem. Even during decades of Cold War, we always talked to the Soviet Union. Why shouldn't we talk to the Russians, despite our fundamental differences?

BLITZER: The last time we spoke, we spoke about a potential NATO role in helping all those hundreds of thousands of people in Darfur in the Sudan. And there's been some baby steps, I think it's fair to say that have been taken, but people are dying. A lot of people have been killed in what a lot of people are seeing is genocide and NATO seems to be on the sidelines.

SCHEFFER: No, that's not fair. It's unfair because NATO has entered into a serious relationship with the African Union. We have now and have been over the past year since we last spoke transported a lot of African Union forces in and out of Darfur. We have a serious relationship.

BLITZER: NATO could be doing a whole lot more.

SCHEFFER: But the but is, that if ever NATO would be in a role to do more, first of all, you can ask a legitimate question if it should be NATO doing this. I think it should be the U.N. in the first place doing this, but you need a minimum of, let's say, political foundation to do such a thing. And you know that the security counsel is paralyzed on Darfur because there is not a possibility to have resolution.

BLITZER: So we shouldn't be holding our breath waiting for some dramatic new NATO --

SCHEFFER: I think, again, it's not entirely correct and good to single NATO out here. NATO is doing what it can do in the framework of its responsibilities for the African Union, and on specific requests of the African Union. The Africans and the African Union are not asking NATO to do anything more than we do at the moment, and as long as that is not happening, I think the NATO role is an important one and should stay as it is.

BLITZER: Secretary General, good luck.

SCHEFFER: It was a pleasure. Thank you so much.

BLITZER: Thank you.

SCHEFFER: Thank you.

(END VIDEOTAPE)

BLITZER: NATO, by the way, has started a new advertising campaign. Jaap De Hoop Scheffer says NATO wants to win hearts and minds in Afghanistan, as well as here in the United States, Canada, Britain and other nations where public opinion is vital to the war effort.

"Magnum P.I" on the big screen. Hollywood rumors or is it a project in the works? I'll ask the magnum himself, Tom Selleck is here in THE SITUATION ROOM.

BLITZER: President Obama laying a wreath at the Tomb of the Unknowns. The actor Tom Selleck was also here in Washington this week. He's working to honor fallen heroes, in this case, from the Vietnam War. I spoke to him about his efforts.

(BEGIN VIDEOTAPE)

BLITZER: Let's talk about what brought you to Washington right now. This Vietnam War memorial project, it's a subject close to my heart. I know it's close to your heart. Our parent company Time Warner gave a lot of money to help build this new facility.

TOM SELLECK, ACTOR: Time Warner gave us $10 million.

BLITZER: They really believe in what's going on. Tell us about it.

SELLECK: Well the next step -- look, the Vietnam memorial evokes incredible emotion for people who visit it. It's a very personal emotion. The only war memorial I can think of, dedicated to a given war that has names on it and those names aren't even alphabetical, they're chronological. I think the next step we're working towards is building an educational center, under ground, near the wall, to tell the stories of the individuals who paid the ultimate sacrifice for their country. Not only in Vietnam but in all of America's wars. And I --

BLITZER: Why is this so personal to you?

SELLECK: It's my generation. As it is yours. I served. I'm a veteran. I think the long-term lesson of Vietnam is really that we didn't always treat our troops so well. I think you hear that every day. No matter where anybody is politically. They don't just pay lip service to the fact that we need to support our troops. They mean it. And --

BLITZER: It's changed dramatically since now we -- we treat the troops, everybody, no matter if they agree or disagree with the policy of the war, the troops are sacrosanct.

SELLECK: Well as someone who wore the uniform in those days, it wasn't always popular to walk through an airport wearing one. I always thought that was a shame. This is -- it's important to take this positive recognition of people who served their country, they don't give orders, they take orders and they take it in the name of freedom and preserving our liberty and I think we need to celebrate our heroes. I think -- I hate to quote Calvin Coolidge, but I think he said a nation that forgets its heroes is destined to soon be forgotten.

BLITZER: You came with a poem to Washington.

SELLECK: Yes.

BLITZER: And you read it at this Vietnam War memorial. Do you want to read it or just say it from the heart?

SELLECK: I think I can say it from memory. If you are able, save a place for them inside of you. And save one backward glance when you are leaving for the places they can no longer go. Be not ashamed to say you loved them, though you may or may not have always, take what they have left you and what they have taught you with their dying and keep it with your own, and in that time when men feel safe, to call the war insane, take one moment to embrace those gentle heroes you left behind. That was written by Major Michael Davis O'Donnell two months after he wrote that he was listed as missing in action on a helicopter mission in Cambodia. In 2001, they recovered his remains and he's in Arlington cemetery now and on the wall. BLITZER: That brings back a lot of memories of what happened, not all that long ago. Thanks for what you're doing.

SELLECK: Thanks, Wolf.

(END VIDEOTAPE)

BLITZER: And when we come back, we're going to have a little bit more of that interview. Tom Selleck responds to rumors out there that there could be a new motion picture, "Magnum P.I." We'll ask him about that.

And a champion takes the fall. Lance Armstrong's cycling spill, just one of this week's "Hot Shots."

(COMMERCIAL BREAK)

BLITZER: Here's a look at some of this week's "Hot Shots," pictures coming in from our friends at the "Associated Press."

In Spain, Lance Armstrong took a fall and broke his collarbone during a race. In Illinois, former Governor Rod Blagojevich took to the airwaves of a radio station as a guest host. In North Dakota, a dog named Elsie looked on as the flood waters rose higher and higher. And in Colorado, a red robin made an appearance as the snowstorm moved in.

Some of this week's "Hot Shots," pictures worth a thousand words.

Is it a post script or a preview? Here's the final part of my interview with the actor, Tom Selleck.

(BEGIN VIDEOTAPE)

BLITZER: Tom, I want you to turn around and look at the video screen. Look the other way, right there. You remember that, right?

SELLECK: That would be Thomas Magnum.

BLITZER: That would be you.

SELLECK: Yes.

BLITZER: All right, here's the big question. The little screen, we all remember. "Magnum P.I.," the big screen. You know there's a lot of rumors circulating that there will be a major motion picture.

SELLECK: Yes. They haven't called or they haven't written, but whatever happens with magnum feature film, I have no idea. Here's what I hope doesn't happen, and I think people recognize this. When studios buy television shows and make big movies out of it, they spend $100 million and create big explosions and make fun of it. That will not work with Magnum. Magnum is more like "Star Trek." The fans of Magnum are now two or three generations, no more alliance from the show than I remember. If they do make a Magnum movie, I hope they pay homage to it.

BLITZER: Will you be a star of that movie?

SELLECK: As soon as they ask. As long as he is not 26-years-old.

BLITZER: Let me vote as just one fan, we hope they do that.

SELLECK: Thank you, thank you, that's very nice.

(END VIDEOTAPE)

BLITZER: And that's it for this week. I'm Wolf Blitzer here in THE SITUATION ROOM. Join us weekdays from 4 to 7 p.m. Eastern and every Saturday at 6 p.m. Eastern on CNN and at this time every weekend on CNN International. The news continues next on CNN.